Workiva Inc. Class A

Good afternoon, ladies and gentlemen. Welcome to Workiva's Q4 2025 earnings call. My name is Bailey, and I will be your host operator on this call. After the prepared comments, we will conduct a question and answer session. Instructions will be provided at that time. Please note that this call is being recorded on February 19, 2026, at 5 p.m. ET. I would now like to turn the meeting over to your host for today's call. Katie White, Senior Director of Investor Relations. Please go ahead.

Good afternoon, and thank you for joining Workiva's Q4 2025 conference call. During today's call, we will review our fourth quarter and full year 2025 results and discuss our guidance for the first quarter and full year 2026. Today's call will include comments from our Chief Executive Officer, Julie Isco, followed by our Chief Financial Officer, Barbara Larson. We will then open up the call for a Q&A session. After market closed today, we issued a press release, which is available on our Investor Relations website, along with our quarterly investor presentation. This conference call is being webcast live, and following the call, an audio replay will be available on our website. During today's call, we will be making forward-looking statements regarding future events and financial performance, including guidance for the first quarter and full fiscal year 2026. These forward-looking statements are based on our assumptions as to the macroeconomic, political, and regulatory environment as of today reflect our best judgment based on factors currently known to us, and are subject to significant risks and uncertainties. Workiva cautions that these forward-looking statements are not guarantees of future performance. We undertake no obligation to update or revise these statements. If the call is reviewed after today, the information presented during this call may not contain current or accurate information. Please refer to the company's annual report on Form 10-K and subsequent filings with the SEC for factors that may cause our actual results to differ materially from those contained in our forward-looking statements. Also, during the course of today's call, we will refer to certain non-GAAP financial measures. Reconciliations of GAAP and non-GAAP measures are included in today's press release. With that, we'll begin by turning the call over to Workiva's CEO, Julie Isco.

Thank you, Katie, and thank you all for joining us. We closed 2025 with strong momentum. We delivered another guidance feed that reaffirms our position as a trusted platform in the office of the CFO. Our Q4 subscription revenue grew 21% and total revenue grew 20%. both compared to Q4 of 2024. For the full year 2025, we achieved 22% subscription revenue growth and 20% total revenue growth, well ahead of the guidance that we had set at the beginning of the fiscal year. We also delivered profitable growth. We had another quarter of accelerating margin improvement with a Q4 non-GAAP operating margin of 19%. This was a 160 basis point beat on the high end of the guide and a 1,170 basis point improvement compared to Q4 of 2024. For the full year 2025, we delivered meaningful progress towards our 2027 medium-term model targets. Our non-gap operating margin was just shy of 10%. This is 440 basis points above the guidance that we had set at the beginning of 2025 and 560 basis points above full year 2024. Our Q4 momentum reflected broad-based durable demand across our AI-powered platform. It also reflected our customers' deepening commitment to Workiva as they transform how work gets done and how their most critical financial and non-financial data is managed. Before I move into a few deal examples from the quarter, I'd like to address a broader narrative that's dominating conversations in the SaaS market. There's an emerging view that as AI changes how work gets done, traditional SaaS platforms become significantly less valuable, and in some cases, obsolete. We understand that perspective. Many workflow tools that organize tasks, route information, or summarize activity can increasingly be automated or agentized. However, this is not the category Workiva operates in. We operate where data needs to be trusted, traceable, defensible, and audit-ready. In an AI-driven world, what matters most to a CFO is an automation. It's confidence in their data. And as reliance on AI increases, trust in that data becomes even more critical, not less. CFOs and finance leaders and risk teams don't just need answers faster. They need answers that they can stand behind with confidence. They need data accuracy, data consistency, data integrity, and data traceability. They need to be able to explain and defend any number at any point in time. That's where Workiva is fundamentally different. We're not just a series of workflows that can be automated or AI'd away. We're a trusted platform where data is controlled, connected, auditable, and governed by design. Every number, every narrative, and every change is traceable with full lineage and accountability. And more importantly, AI doesn't replace this foundation. It depends on it. And that's why, as AI adoption increases, we believe Workiva becomes even more relevant, not less. Customers in the office of the CFO are choosing Workiva's platform because we're not just another app in the stack. Over the past decade and a half, we've become not just a system of record, but an essential and trusted system of record. A system of truth. In an era of AI, our customers need intelligence that they can trust within a platform and in an environment where accuracy, accountability, and assurance are non-negotiable. Workiva is just that, a platform of trust. Let's now look at a few specific examples from Q4 that demonstrate how our platform is winning in the market and helping our customers solve their most complex reporting challenges. First, a global FinTech and insurance brokerage firm has joined as a new platform customer, purchasing five solutions, including controls management, global statutory reporting, management reporting, policies and procedures, and SEC reporting. This mid-six-figure deal is part of a finance transformation project focused on eliminating manual workflows and addressing reporting inefficiencies. The deal was a co-sell and will be implemented by a Big Four firm. Second, a large regional bank and mortgage originator in the U.S., signed a mid-six-figure account expansion deal. A loyal customer for 13 years, this bank increased its annual spend with Workiva by over 150% by adding bank reporting, controls management, management reporting, SEC, and carbon and sustainability reporting. This deal was a co-sell with a technology platform partner. And third, a UK-based global pharmaceutical leader who has been a Workiva sustainability reporting customer since 2017 signed a mid-six-figure expansion deal, adding controls management, ESEF, and SEC reporting. This investment was made to significantly mitigate reporting risk and drive enterprise-wide efficiency. It included modernizing a manual reporting process involving over 200 collaborators. The deal was sourced and will be implemented by a Big Four firm. While we're winning larger platform deals, our financial reporting-specific solutions also continue to show strong momentum. I'd like to highlight a few of our Q4 deals. First, a global transportation and mobility leader, who's been a loyal customer for eight years, nearly tripled their annual spend through a mid six figure expansion for multi-entity reporting. The business driver for this deal was a critical need to move their complex global entity structure away from high risk manual processes towards automated compliance. The advanced AI capabilities of the Workiva platform was a competitive differentiator in this opportunity. The deal was a co-sell and will be delivered by a big four firm. Second, a European-based global design and consultancy firm landed as a new customer with a multi-six-figure deal for multi-entity reporting. The primary driver for this deal was to streamline complex reporting across their global subsidiaries. This was a competitive win against a global provider of tax technology and other legacy systems. The deal was a co-sell with a regional technology partner. Third, we signed a multi-six-figure new logo deal for multi-entity and SEC reporting with a Brazilian industrial conglomerate and investment holding company. As a conglomerate, this business holds varying stakes in its companies, ranging from 100% ownership to minority interest. They operate in 19 countries, manage a hybrid of private and public reporting, and must comply with multiple accounting standards, all of which lead to significant complexity in financial reporting. The deal was sourced and will be implemented by a Big Four firm. I'll move on now to highlight two deals in one of our vertical specific solution categories, financial services. First, a global financial services provider offering fund administration signed a seven-figure account expansion deal for fund reporting. This was an eightfold increase in spend. This customer started with Workiva in December of 2024 with a small set of funds on the Workiva platform. The deal expands the Workiva solution firm-wide as they transform their investment reporting processes and transition from manual processes supported by Microsoft Office. The deal was sourced and will be implemented by a regional advisory partner. Second, a U.S.-based professional services consulting firm landed as a new customer with a high six-figure deal for fund reporting, controls management, and tailored shareholder reporting. The driver behind this deal was to provide the firm with greater control over filings, enable faster turnaround for their customers, and eliminate their dependency on dated solutions from their financial printers. The deal was a co-sell and will be implemented by a regional advisory partner. We also continue to see strong momentum with GRC. I'll highlight a few of our Q4 account expansions. First, a top five Canadian bank signed a mid-six-figure expansion deal for Controls Management. A Workiva Sustainability Reporting customer since 2024, this firm more than doubled their spend with us with this expansion. The goal was to replace a legacy GRC platform to manage their SOX processes. Management of SOX at a bank of this size involves up to 3,500 tested controls and a complex set of reporting requirements. This deal was sourced and will be implemented by a big floor firm. Second, we landed a multi-six-figure account expansion deal with a US-based industrial technology company for audit management, compliance management, and policies and procedures. The driver of this deal was the streamlining of policies, internal audit, and user access reviews. This was a competitive win over an enterprise SaaS platform provider. The deal was a co-sell with a global advisory and regional technology firm. And third, a European-based medical supply company purchased a multi-six-figure account expansion for three GRC solutions, including audit management, controls management, and operational risk management. This company started as an SEC reporting customer back in 2021. This account expansion has nearly tripled their spend with Workiva. This was a competitive win over a GRC platform provider, and it involved the migration of an ERP-based GRC solution. The deal was a co-sell and will be implemented by a Tier 2 accounting firm. I'll turn now to sustainability. Last year, we saw the market navigate a changing political and regulatory landscape. As we've highlighted in past calls, we did see demand for sustainability reporting moderate in 2025 when compared to 2024 highs. As we look forward to 2026 and beyond, we remain optimistic on the strategic value of this market and our strong competitive position to drive growth. We see companies moving forward with more purpose now as they've gained greater clarity on the scope and the timeline of regulations. Here are a few sustainability deal highlights from the quarter. First, a top five global commercial real estate services and investment firm signed a mid six-figure expansion deal for sustainability reporting and policies and procedures. This company is navigating several major global regulatory shifts that transitioned from voluntary to mandatory in the last 24 months, including the CSRD, the Australian Mandatory Disclosures, and plans for the upcoming California Climate Disclosure Rules. This company is also committed to being net zero by 2040 and is strictly governed by the Science-Based Target Initiative. Their targets include a 50% absolute reduction in Scope 1 and 2 emissions by 2030 and a 55% reduction in Scope 3 emissions intensity by 2030. This deal was a co-sale and will be implemented by a Big Four firm. Second, a global diversified industrial company signed a multi-six-figure account expansion for multi-entities sustainability reporting. This eight-year loyal SEC customer has complex sustainability reporting requirements as they operate in 130 countries and across multiple business units, including energy, automotive, agriculture, mobility, and data centers. The sustainability reporting drivers behind this deal include compliance with the CSRD, support for ratings reporting to MSCI and S&P Global, and the upcoming State of California climate disclosure. The deal was a co-sell and will be implemented by a regional advisory firm. And third, A European-based manufacturing company landed as a new customer with a multi-six-figure deal that included sustainability reporting and Workiva Carbon. The company's sustainability reporting requirements are for an end-to-end sustainability data management platform to streamline CSRD compliance, reduce manual workload, and enhance reporting accuracy. This is a replacement for an existing GRC tool that they were using to muscle through their first year of CSRD compliance. The deal was a co-sell and will be implemented by a regional advisory firm. To conclude our solution section, let's look at the capital markets landscape. Q4 IPO activity was more measured compared to the uptick seen in Q3. We believe that this was influenced by the timing of the government shutdown. Workiva still remained a key partner in this space. We successfully supported high-profile listings, and customers continued to purchase our S1 solution as part of their listing preparation process. Despite a tempered market, we continue to see healthy demand from private companies maturing their processes in anticipation of an IPO opportunity over the next 18 months. We believe a robust backlog of companies is waiting for the right conditions, and we stand ready to support them with our AI-powered platform and our purpose-built solutions. Now, before I move on to talking about our innovation, I'd like to remind you that Workiva does not have a seat-based licensing model. we've been pricing on value metrics and consumption for many years. Whether it's a customer's AI agent or a human, we charge based on volume and usage, not on who or what is interacting with the platform. As I mentioned earlier in my remarks, Workiva operates where accuracy, defensibility, and accountability are required, making our platform even more relevant in an AI-driven world. Our relevancy is critical, of course, but so is using AI to both build, innovate, and execute with speed and to ensure our customers have high impact, differentiating AI in our platform to do their most important work. Unlike other companies who are simply bolting on AI, Workiva's AI capabilities are architected directly into the core of our platform. Customer adoption of our AI capabilities continues to grow, and we've accelerated the pace of AI product innovation. This quarter, we delivered several high-impact enhancements across the platform. First, we launched an AI-powered capability that analyzes queries and manages data directly within the Workiva platform. Customers are now empowered to leverage AI across their data, queries, and tables to accelerate data preparation and surface insights. Second, we're embedding and scaling additional AI capabilities across our GRC solutions. Newly launched capabilities enable users to automatically ingest, analyze, and validate supporting documentation, or in GRC terms, evidence, for audit, risk, and compliance processes. This transforms manual, document-intensive tasks into an automated, insights-driven process within a secure, centralized environment. And finally, we continue to expand AI capabilities across financial reporting. Since AI is already embedded into the Workiva platform, no add-ins or plug-ins are required. For financial reporting, newly launched AI capabilities can be used to generate narrative insights and summaries for reports, get explanations of data and formulas through natural language interactions, and leverage strong conversational querying, explanation, and reasoning over data context and logic. All of these platform capabilities have the potential to drive meaningful impact across all of our financial reporting solutions. The market is moving fast on AI, and so are we. Again, as AI adoption accelerates, the demand for trusted, connected data will only grow. We believe this shift is a durable, long-term tailwind for Workiva. As we roll into 2026, we do so with a few new players on the Workiva leadership team. In Q4, we announced three new additions, including Michael Pinto, who joined us in November as our new Chief Revenue Officer. As discussed on our Q3 call, Michael oversees Workiva's global sales, partnerships and alliances, and commercial operations. Second, Deepak Bharadwaj joined us in December as our new Chief Product Officer. Deepak most recently served as Head of Product Management for Adobe's Document Cloud, where he led the launch of Acrobat Studio, an AI-driven productivity and creativity hub. Before Adobe, he spent several years at ServiceNow, where he played a key role as a general manager in launching and scaling their successful employee experience platform. And finally, Barbara Larson joined us in January as Workiva's new CFO. Barbara brings more than 20 years of experience in various finance leadership roles, scaling high-growth public software companies. Most recently, she served as CFO of SentinelOne. Prior to that, she spent a decade in finance at Workday, including serving as their CFO. We are thrilled to have her on our team. Barbara is on the call today, and she'll join us in a few moments to provide a detailed review of our financial performance. In addition to these new executives, in the last week of January, we appointed two new members to our board of directors. We announced that former Cisco and Autodesk CFO Scott Herron and former Workday co-president, CFO and EVP Mark Peek will both be joining the Workiva board in the coming months. Scott and Mark both bring deep expertise in transforming and scaling high-growth public technology companies. They also have extensive experience strengthening financial discipline, and driving operational excellence. 2025 was a year of strong growth, operational resilience, and meaningful performance improvement. I want to thank our employees for their unwavering commitment and their execution. In a volatile market environment, we remained focused on delivering value for our customers. We exited 2025 as a different company than we entered it. we are stronger, more disciplined, and more agile. This progress positions us well to enter 2026 with momentum and confidence. Our continued innovation, durable growth, expanding profitability, and sustained relevance all reinforce our position as a leading public software company serving the office of the CFO. And with that, I'd like to give a warm welcome to Barbara Larson. She'll walk you through our financial results in more detail and our 2026 guidance. Over to you, Barbara.

Thanks, Julie. It's great to be here. After spending my first month with the team in the business, I'm energized by the opportunity ahead as we continue to focus on delivering both durable growth and improving profitability. I'll start with an overview of our financial and key metric highlights for the fourth quarter and full year 2025, followed by our guidance for the first quarter and full year 2026. As Julie mentioned, we delivered a strong finish to the year. In Q4, we generated $239 million in total revenue, up 20% year over year, and beating the high end of our guidance range by $3 million. Foreign currency fluctuations had an approximately one percentage point favorable impact on our reported growth rate. Q4 subscription revenue was $219 million, up 21% year over year. Both new customers and account expansions continue to contribute to our revenue growth, with new customers added in the last 12 months accounting for approximately 40% of the increase in Q4 subscription revenue, consistent with our expectations. Q4 professional services revenue was $20 million, up slightly versus the prior year. In line with our strategy, we continued to grow our higher margin XBRL services while we shifted lower margin setup and consulting services to our partners. Our non-GAAP operating margin for the quarter was 19.1%. This beat the high end of our guidance by 160 basis points, driven by operating leverage from our top line outperformance and our continued focus on operational efficiency and productivity. Moving on to our performance metrics for the quarter. We had 6,624 customers at the end of Q4 2025, an increase of 319 customers year over year. Our gross retention rate was 97%, exceeding our 96% target. And our net retention rate was 113% for the quarter, compared to 112% in Q4 2024. Consistent with our reported revenue growth, there was an approximately one percentage point favorable impact on NRR due to foreign currency fluctuations. During the quarter, 74% of our subscription revenue was generated from customers with multiple solutions, up from 70% in Q4 2024. Growth in our large contract customer cohorts also reflected strong momentum. As of the end of the fourth quarter, we had 2,507 contracts valued at over 100K per year, up 22% from the prior year. The number of contracts valued at over 300K totaled 592, up 42% year over year. And the number of contracts valued at over 500K totaled 248, up 37% from Q4 2024. Moving on to our full year performance. Total revenue for 2025 was $885 million, up 20% over the prior year. Similar to Q4, this result includes an approximately one percentage point favorable impact due to foreign currency changes. Subscription revenue was $813 million, up 22% year over year. At year end, our current remaining performance obligations were $757 million, up 21% over the prior year. This growth, which reflects the revenue we expect to recognize in the next 12 months, includes an approximately 3 percentage point favorable impact due to foreign currency. Professional services revenue was $72 million, relatively flat compared to the prior year. Consistent with our plan, we successfully shifted more low-margin setup and consulting services to our partners, which was offset by higher XBRL services year over year. We also had another strong year of international expansion. Total revenue outside the U.S. was 27%, up 300 basis points compared to the prior year. Our full year non-GAAP operating margin was 9.9%, beating the high end of our guidance by 50 basis points. This result is also 440 basis points above the high end of our original full-year guide that we set on the Q4 call last year. We have made meaningful progress toward our 2027 operating margin target in the last year, and these results reflect our ongoing commitment to operational rigor as we continue to scale and mature the business. Moving on to the balance sheet and cash flows. As of December 31, 2025, cash, cash equivalents, and marketable securities were $892 million, an increase of $35 million over the prior quarter. For the full year 2025, we delivered a free cash flow margin of 15.6%. which beat our guide by 360 basis points and represents a 390 basis point improvement year over year. This outperformance was driven by two factors. First, favorable working capital timing related to customer payments and tax impacts. And second, improved operational efficiencies across the organization. During the fourth quarter, we deployed a portion of our free cash flow to repurchase 131,000 shares of our Class A common stock for $12 million. This brings our full year total to $72 million under the share repurchase program authorized in July 2024. As of December 31st, $28 million remained under the original $100 million authorization. In February, our board authorized a $250 million increase to this program. This expansion reflects our confidence in Workiva's intrinsic value and the durability of our business model. While we remain focused on investing in growth and innovation, our strong free cash flow profile enables us to return capital to our shareholders while effectively managing dilution through opportunistic repurchases. Turning now to our outlook for Q1 and the full year 2026. Our performance throughout the year and the momentum we generated exiting 2025 sets us up well for 2026. I'm partnering closely with Julie and our leadership team to ensure we execute on Workiva's commitment to delivering both durable top-line growth and expanding operating leverage across the business. With that in mind, For the first quarter of 2026, we expect total revenue to range from $244 million to $246 million. We expect services revenue to be relatively flat compared to Q1 2025. And we expect non-GAAP operating margin to be in the range of 15.5% to 16%. For the full year 2026, we expect total revenue to range from $1.036 billion to $1.04 billion. We expect subscription revenue to grow approximately 19% year over year. And similar to 2025, we expect total services revenue will be relatively flat year over year. We expect our non-GAAP operating margin to range from 15% to 15.5%. This 560 basis point year-over-year improvement at the high end reflects our ongoing commitment to drive operating leverage as we scale the business and make meaningful progress toward our medium and long-term financial targets. we expect 2026 free cash flow margin to be approximately 19%. For additional details on seasonality and other model assumptions, please see our quarterly investor deck available on our IR website. Finally, the company's 2027 and 2030 financial targets outlined at the investor day in September remain intact and unchanged. To wrap up, our 2025 financial results are a direct reflection of our commitment to profitable growth at scale. Our platform continues to resonate with offices of the CFO around the world, and I'm incredibly excited to have joined Workiva at this pivotal moment in our journey. As we look toward 2026 and beyond, we're entering our next phase of growth as a billion-dollar revenue company, on track to achieve gap profitability this year. My team and I are focused on driving the operational maturity and disciplined execution required to scale the business efficiently and drive durable, long-term value for all of our stakeholders. I look forward to meeting many of our analysts and shareholders in the coming weeks and months ahead. Thank you all for joining the call today. We're now ready to take your questions.

Operator, please open the line for Q&A.

We will now begin the question and answer session. To ask a question, you may press star then 1 on a touch-tone phone. If you were using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw the question, please press star then 2. At this time, we will pause momentarily to assemble our roster. Our first question comes from Rob Oliver with Baird. Please go ahead.

Great. Thank you. Good afternoon. I had two questions. Julie, one for you, and then Barbara, a follow-up for you. So, Julie, I appreciate your commentary relative to AI and Workiva's positioning. I'd like to ask specifically about some of the new wins, obviously the contributions to subscription in Q4, but notably the multi-product platform wins, the six-figure wins. that you guys had in the quarter and called out in your prepared remarks. Can you talk about how AI is playing a role in those discussions, if it's functionality that's being employed today, if it's part of your roadmap going forward? What are customers looking to you for today on AI as a component of those deals?

Sure. Thank you for the question, Rob. Good to have you on the call. I think first off, those multi-solution account expansions, large customer wins, are happening with the broad-based platform. You're asking specifically around AI's contribution. I will tell you this, of all the customer conversations I have, AI is a topic, a strong topic of conversation. They have to have it and they're ready to move this moment, but they are buying because they know Workiva focuses on innovation and we have it and we are demoing those. So adoption is increasing simply because now there is a recognition that they can use it in an environment that is safe and secure and it applies to all of the information across the portfolio of solutions. So it's absolutely playing a role in the buying decisions. I believe I highlighted one on the call today in my remarks earlier that it was a significant reason for the win. The other part of the question was around how it's showing up in the product. And as you know, we adopted a good, better, best model when it comes to pricing and packaging. And we have our AI capabilities in the premium tier, and we have that across all categories on our platform, sustainability, financial reporting, as well as GRC. And we're seeing some strong traction in the premium tiers.

Great. Thanks. I appreciate that, Julie. And then, Barbara, welcome. A question for you. Just your comments about efficiency and productivity and the commitment to operational rigor. Just be curious, having had some experience at bigger companies and now stepping in here to the role at Workiva, as you look at the financial targets in 27 and 30, which you've reiterated, looking at the business, where do you see the opportunity for continued progress on that operational scale? rigor and margin side? What are some of the areas that sort of stand out to you? Thank you.

Hi, Rob. Thanks for the welcome and thanks for being on the call. I definitely appreciate you calling out the progress. We certainly feel like we're well on our way to achieving those 2027 and 2030 targets. And then in terms of, you know, where we expect to see the leverage. It's kind of more of what we have been seeing in 2025, really across the business.

And then, of course, we have opportunity to drive more productivity in the sales and marketing side.

Thank you.

Our next question comes from Terry Tillman with Truist Securities. Please go ahead.

Yeah, hi, team, and welcome aboard, Barbara. Yeah, I had a question and a quick follow-up. I was hoping we could touch on Michael Pinto. You know, I know he's still kind of relatively new in the role to really lead the go-to-market efforts at CRO. But I was just curious if we could get just some early observations, maybe some areas where he's focusing, and potential timing of impact from some of those efforts. And then I had a follow-up.

Sure. Sure. We are very happy to have Michael joining us on the team with his strong background in transforming and scaling high-growth SaaS companies and certainly to the multi-billion where we are headed. His mandate is really multifold. First thing is just building a strong team that can scale globally. It's also here to help strengthen our partner ecosystem. and importantly, refine sales plays in various regions around the world. And focus too, because of his background in AWS and Databricks, focus on our place in the data ecosystem, which is becoming increasingly important. And then overall, just scaling and strengthening our go-to-market machine. And he's been going deep into the business. He's looking around in every function, in every area under the commercial team, and already bringing significant insight and opportunity here. So we're very happy with the progress he's made to date, and we're looking forward to seeing what he's going to be contributing very soon with the coming quarters.

That's great. Thanks for that, Julie. And I guess, Barbara, in terms of anything you can share about NRR directionally and 26 as part of the plan, and would there be any discernible shift from that new customer contribution at about 40%? Thank you.

Thanks for the question, Terry. So for 2026, we're modeling the business at 96% for GRR and 110% for NRR, and we're striving to maintain that going forward. And then your question in terms of the split of the business, you know, more of what we've been seeing, so about 60% new, 40% from expansions, but that can shift, oh, sorry, opposite, 40% new, 60% expansion, but any given quarter, we can see that shift a little bit.

All right, great, thanks.

Our next question comes from Alex Sklar with Raymond James. Please go ahead.

Great, thank you. Julie, first one for you, following up on Rob's question around your growing AI capabilities What have you seen in terms of usage so far from those initial features you launched with customers that have had access? And how should we think about how incremental your AI roadmap plans are for 2026 based on some of the prepared comments in terms of the monetizable opportunity there? Thanks.

Sure. So we do have a lot of interest in our AI capabilities from customers. And as I mentioned, continue to see improvements. increasing adoption and use once they recognize it's in the trusted, controlled environment. To date, we've got almost 30% of our customers having enabled AI on their platform. And again, once they enable and adopt, we continue to see increasing use. So we've had great feedback on what we've rolled out. A lot of those features, we announced several of them at our customer conference, Amplify, the last quarter of last year. and continue to work with the customers just to expand their use of our AI capabilities. And importantly, we're learning what capabilities bring the highest value and deliver AI that's actually going to drive impact. And as we do that, we can put our investments in that direction. And certainly we're able to put those in the upper tier of our offerings and ensure that we're getting our value for the value that we're bringing them. And we're gonna continue to do that and yes, ultimately monetize our AI capabilities. So thank you for the question.

Okay, great. And then maybe for you or Barbara, but on the strong bookings exiting the year, if you had to disaggregate some of the drivers How much do you think is already coming from some of the go-to-market changes that you started on a little over a year ago? How much is coming from the new packaging efforts or from partners or just from broader multi-solution sales? How would you stack rank some of the biggest contributors to the bookings growth?

Thanks. I will take that one off and just say it is broad-based around solutions. As Barbara mentioned, the mix of the new logos and expansion were focused on both. So it's coming from, again, our multi-solutions across the platform, and it isn't one or two standouts. And the changes that we have been making to increase operating leverage and increase productivity have been continuing on and progressing. So much of it is around our own execution. Our partner ecosystem continues to strengthen. So it isn't one thing. It's broad-based. It's all the actions we've been doing to get stronger ourselves, build our team's get higher profiles of individuals out there with feet on the street, those who sell with partners, focusing on the platform play because that is resonating in the market. So just going after our opportunity in a stronger way with the full breadth of our platform is really what it is, just getting better.

Okay, great. Thank you.

Our next question comes from Adam Hotchkiss with Goldman Sachs. Please go ahead.

Great. Thanks so much for taking the question. Julie, I wanted to start on the capital markets environment. I know you mentioned Q3 was strong, Q4 a little bit softer, but some, I think, strong expectations for next year. How should we think about what is contemplated in 2026 from a guidance philosophy perspective around capital markets? And then I had a quick follow-up.

Sure. One of the fun topics we get almost every call, what's happening with cap markets? When will it come back? Is it back? And we did see a moderation of IPO activity in Q4 relative to a stronger Q3. But we're really encouraged by the number of companies that we've been speaking to that are considering IPO activity in 2026. And so the simple answer is, yes, we've incorporated into our guides We're anticipating some growth this year, but we also recognize there are just a lot of factors and market variables that might impact that rate of growth. So I'll say this, we're optimistic about the IPO momentum as we kick off 2026, but there are a lot of macro dependencies to sustain the growth throughout the year. And I can name a few. We have a new Fed chair, economic instability, those kinds of things. So they're all new valuations in technology companies is one.

So a number of factors, but we do feel very optimistic from the customer conversations that we've had.

Okay, fantastic. And then as we sort of look at the margin progression, it does feel like you're progressing a little bit ahead of schedule on the margin side relative to the 2027 guidance. Barbara, I realize you're early into the role, but any early observations on how that's going? And maybe even Julie, given you've been involved on the operational side, just learnings as you've been going through the margin expansion piece, anything that's surprised you or been encouraging through that process? Thanks so much.

Yeah, I'll start that out. We're really pleased with the pace of operating margin expansion we've been able to deliver in 2025, as well as what we're guiding to 2026. So we've definitely shown our ability to drive operating leverage and we're confident that we will continue to do the same and meet those medium and long-term targets.

Okay, thank you very much.

The next question comes from Steve Enders with Citi. Please go ahead.

All right, great. Thanks for taking the questions here. I guess to start, I just want to ask on, I guess, the guidance philosophy, and Barbara, I appreciate your coming on board with an already established team, but any kind of change in how you approach the guide and what's being, I guess, contemplated here versus prior periods?

Casey, thanks so much for the question. You know, our guidance philosophy hasn't changed. It continues to reflect our best view of the business at a specific time. I've inherited a very strong finance team. I've been working closely with them, as well as with Julie and the rest of the leadership team, and there's clear continuity in how we approach our outlook.

Okay, perfect. That's great to hear. And then maybe just on the updated pricing model and the good, better, best, just, I guess, what have you seen so far from customer uptake of, I guess, that program and kind of, I guess, what are the assumptions that you're making moving forward in terms of how that kind of plays out in converting customers up to higher tiers?

As I mentioned, we're seeing uptick in our pricing For more premium tiers, we're putting in advanced capabilities and we've seen a lot of traction and it is contributing to the momentum that we're seeing that we exited 2025 with. So we're very optimistic, a good way to get more of our value to the customer and again, get value on our end. We've, again, rolled it out for DRC, for financial reporting, sustainability. And it's also a good way for us to take some learnings from AI that we've put in those tiers. And we see the customers focusing in certain areas of the platform and certain capabilities. So we can take that to build even more valuable offerings for the customer. So it helps in both ways, getting value, but also helping us understand more what will resonate with customers and bring even more value.

Okay, perfect. Great to hear, and thanks for taking the questions.

Our next question comes from Daniel Jester with BMO Capital Markets. Please go ahead.

Great. Thank you for taking my question. Welcome to the call, Barbara. Look forward to working with you. Maybe just on the vertical piece, Julie, you talked about financial services, and I think you talked about financial services throughout a lot of 2025. Can we just spend a moment there sort of regaging kind of where we are in that opportunity? As you think about 2026, how do the verticals stack up relative to the other growth opportunities you have?

Sure. Well, I will start. You mentioned financial services, Dan. Thank you very much for the question because I'd love to highlight it, why I highlighted it on the remarks earlier. We just continue to land both large new logos and account expansion deals in financial services. We co-sell with partners in this vertical, and we have a lot of regulatory use cases in addition to, of course, our horizontal solutions. It's just been a great story for us, a great growth story. It includes mid-six-figure and seven-figure deals with our fund reporting solution, shown strong performance this year. And just in general, the trends are multi-solution, large deals, focusing on regulation, and, of course, our partners. Gave a few deal examples, too. And this has been our strongest vertical to date. And we're going to continue to move into verticals. We have a few others that we're increasing our investment in as well. So a good area for the Workiva platform.

But our horizontals go in every sector of the economy, and that is front and center, of course.

Great. Thanks for all that insight. And then maybe, Barbara, just on the guidance, you know, FX has been impacting the business for the past couple quarters, including sort of the big impact on RPO and CRPO this quarter. What's embedded in terms of FX in terms of the guidance, and is there anything you'd sort of call out for us as we update our model? Thank you.

Yeah, absolutely. So our guidance for 2026 assumes that our FX rates remain consistent with January 2026 rates. So that's the same approach the teams used historically and then consistent with our standard reporting. We'll provide the specific FX impact on our actual results.

Great. Thank you so much. Thank you.

Our next question comes from Alan Berkoski with BTIG. Please go ahead.

Awesome. Thanks, guys. This is Nick Daniel. It's on for Alan here. Just one question on my end. You guys are doing a really good job adding multi-product customers, and I was just wondering what kind of role does that play in increasing NLR, and how should we think about the ceiling for multi-product customers as a percent of the subscription revenue base?

Thank you. Sorry. Can you repeat the question?

Nick, we couldn't understand it. Alan, sorry.

No, Nick, it's on for Alan.

Nick, on for Alan.

Yeah, no worries. So you guys are doing a really good job adding multi-product customers. I was just wondering what kind of role does that play in increasing your NRR, and how should we think about the ceiling there for multi-product customers as a percent of your subscription revenue base?

I assume you are talking about account expansion is what it sounds like. Okay. So I think we can just talk about new logos first, right? Again, 45% of our customers have...

have one or, excuse me, two or more solutions. And when we do expand, so we have a lot of opportunity still in the 55% that only have one. So we're focusing there. And then we, of course, continue to expand with the new logos as well. But the account expansion is a key focus of effort on our end. There's just a tremendous amount of opportunity to go after. We have a lot to sell, a couple dozen solutions, and as I just mentioned in financial services, it's an area where we're seeing significant account expansion.

Got it. Thank you.

Our next question comes from Brett Huff with Stevens Incorporated. Please go ahead.

Good evening, Julie and Katie. Can you all hear me okay? I'm getting some feedback. Are you getting me okay? Yes, we can hear you. Okay, great. Sorry. So good evening, Julie and Katie, and welcome to a slate of new team members. So I hope things are going well. Two questions. One, to follow up on the helpful 30% of customers are using AI in some way and they seem to be increasing usage. You mentioned monetization, but as you might expect, it's on the tip of the tongue of all of the investors with whom we speak. Can you remind us or maybe fill out your views on kind of mix of monetization, be it you mentioned getting folks into premium additions. Can you talk a little bit about any consumption-based pricing as folks worry a little bit about gross margins and things like that? So that's question one. And then the second question is on GRR. As you all do more bigger deals and you do more multi-product deals, are you far enough into that motion to see what I suspect are positive impacts on GRR yet? Thank you.

So I'll take the pricing question. As I mentioned, we don't have seat-based licensing yet. We're already usage-based, whether it's a number of controls, a number of entities, a number of connections, integrations that our platform connects with. So the seat-based is not an issue for Workiva. We've been usage-based now for six, seven years. And the other way we've been pricing is also, again, the good, better, best model, putting more feature and capability in the some more premium offerings.

So that's how we've been handling our pricing and the packaging. And then I'll just comment on GRR. You know, we continue to have strong GRR, and we're building that into our model going forward.

Great. Thank you. Operator?

This concludes our question and answer session. Thank you for attending today's presentation.

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